Bitcoin Confiscated from Various Cases Worth $1.6 million to be Auctioned by U.S. Federal Agency

08/09/2016

2,700 bitcoins that were forfeited during several cases would be auctioned by the U.S. very soon according to an announcement of a U.S. government agency. Investigations of the online black market known as Silk Road was the source of many of the bitcoins the agency said.

The potential bidders for the auction must register by Aug. 18 for the online auction that is being planned to be held on Aug. 22, said the U.S. Marshals Service which is the U.S. government agency that is conducting the auction. According to the Bitstamp exchange, the total value of the bitcoins being auctioned is about $1.6 million.

This is the latest auction of the digital currency that is being conducted by the Marshals Service. Earlier, bitcoins seized during the prosecution of Ross Ulbricht, who authorities say ran Silk Road, were auctioned off in four prior auctions from June 2014 to November 2015 of bitcoins.

With a $100,000 deposit requirement, the auction will consist of one block. According to the USMS, winners will be notified on the same day.

Ernst & Young auctioned off a tranche of roughly 24,500 bitcoin, confiscated from a former Silk Road user, earlier this year.

The Marshals Service said the 2,719 bitcoins had been forfeited in connection to a case that is one of nine criminal, civil or administrative matters and is subject to the latest auction.

In addition to the bitcoins confiscated by the Marshals Service, those that are being put up for sale were confiscated by the US Department of Homeland Security; the Bureau of Alcohol, Firearms and Tobacco; and the Internal Revenue Service.

The case pertains to the more than $200 million of anonymous online drug sales through Silk Road using bitcoin which was enabled by a scheme orchestrated by Ulbricht, 32. He was convicted in the case and was sentenced in May 2015 to life in prison which is being appealed against by Ulbricht. However the Marshals Service said that only about 2.8 bitcoins in the latest auction came from Ulbricht's case.

A civil forfeiture case related to a Silk Road drug dealer, Matthew Gillum, was the sources of the bulk of the bitcoins in the auction which totaled to 1,294 bitcoins that were seized. The Marshals Service said that Gillum was sentenced in 2015 to nine years in prison.

Carl Force, a former U.S. Drug Enforcement Administration agent was accused of stealing bitcoins during the Silk Road investigation. The Marshals Service said that another 65 bitcoins came from the case of Carl Force who was found guilty in the case and was sentenced in October to 78 months in prison for stealing the bitcoins.

Another 664 bitcoins came from the case of Sean Roberson. According to prosecutors in the case against this Florida man, Roberson had allegedly created an online shop for selling counterfeit credit and debit cards which was illegal. He was found to be guilty and was sentenced to 78 months in prison in November last year.